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The Nifty IT index has staged a strong recovery, rising more than 11 per cent over the past 30 days, as improving investor sentiment and encouraging earnings helped the sector rebound after months of pressure over concerns surrounding the impact of artificial intelligence (AI) on the IT services industry.
According to NSE data, the Nifty IT index was trading at 30,438.30, up 3.38 per cent at the time of reporting, while its 30-day gain stood at 11.37 per cent. Over the past week, the index has gained 5.26 per cent. However, it remained down 21.22 per cent over six months, 20.07 per cent on a year-to-date basis and 13.74 per cent over the past year, indicating that the recent rally has only partly reversed earlier losses. The rally was broad-based, with all 10 constituent stocks of the index trading in the green. Among the major gainers over the last 30 days, HCLTech rose 20.07 per cent, followed by LTIMindtree at 14.68 per cent, TCS at 14.57 per cent, Tech Mahindra at 13.26 per cent, Persistent Systems at 12.69 per cent, and Coforge at 12.53 per cent. Mphasis gained 6.70 per cent, Infosys advanced 6.50 per cent, Wipro added 3.20 per cent, while Oracle Financial Services Software (OFSS) rose 2.76 per cent. The IT sector had been under pressure in recent months amid concerns that rapid advances in artificial intelligence could impact traditional IT services spending and weigh on revenue growth. Investors also remained cautious due to macroeconomic uncertainty and slower technology spending by global clients. However, recent industry reports suggest that fears of AI disrupting earnings may be overstated. According to CLSA, there is no visible negative impact of AI on the earnings performance of software-as-a-service (SaaS) companies, with most firms maintaining or raising their revenue and margin guidance while also beating consensus earnings expectations. Meanwhile, UBS said the Indian IT sector delivered a mixed performance in the fourth quarter of FY26, with mid-tier IT companies outperforming large-cap peers as AI-led transformation and changing client spending patterns reshaped demand. The brokerage noted that while large-cap companies saw more earnings misses, mid-tier firms continued to perform relatively better. Morgan Stanley, however, believes the IT services industry is still in a transition phase of a new technology cycle. The brokerage expects IT services spending to grow at a slower pace than the overall US economy in the near term, indicating that demand recovery is likely to remain gradual despite improving sentiment. The recent rally in IT stocks suggests investors are becoming more optimistic that AI could create new business opportunities for the sector rather than immediately disrupting earnings, even as they continue to closely monitor global technology spending and macroeconomic trends. (ANI)
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